Strategy: Where to play and how to win?

A simple way to define the strategy is ask two key questions: Where to play? and How to win?

Where to play – Defines what markets and customers the company will serve, and more importantly, which ones it won’t.

How to win – Defines the general approach how to find success, differentiate and win customers.

Strategy is not a fancy slide deck – it is more like a concrete plan of where to go and how to get there. A good strategy helps the whole organization to make the right choices in day-to-day operations: how to focus the very limited resources of a startup.

First we check the basics

In this blog post, I look at strategy from a portfolio monitoring perspective. In our weekly partner calls, we put one of the companies under a deeper study and strategy is naturally one of the key themes discussed. You can read more about the monitoring process from the blog entry How we monitor and help our portfolio.

First we ask ourselves some basic questions like:

Is the strategy a good fit with the reality – company SWOT?

  • Does the selected strategy fit the team: experience, core competences, and values?
  • Are the strengths of the product and technology in sync with the plan?
  • Is the target market big enough or at least growing fast enough?
  • Does the vision of the strategy fit our estimation of the market development or potential paradigm shifts?
  • How does it compare with the competition – their weaknesses and strengths?

Is thew strategy crisp and concrete?

  • Is it crisp enough to focus the scare resources and guide the team to make the right choices in real life situations?
  • Is there an action plan? Does it include well-defined milestones and steps? How the progress is measured?

And then we dig deeper

In addition, an Activist VC asks the following types of questions – from the perspective of an experienced exit driven share holder or funding provider:

1. Path to the Exit

2. Out of the box thinking

  • Is a major change in company direction needed – this is often difficult to conceptualize and run from within the company.
  • Does the NIH syndrome limit from acquiring expertise from the outside or turning potential enemies as great allies?

3. Looking a step ahead

The weight and relevance of each question is naturally dependent on the market sentiment and company status. As an outcome of the process we gauge whether we are happy with the current strategy and path forward or do we push for additional activities to develop the plan further.

And finally the execution

We also pay special attention to the execution of the strategy, but that is a good topic for an other future blog – so stay tuned and subscribe!



Artturi Tarjanne